When investing in commercial real estate, there are three main types of buildings. Those in the industry refer to them by three different names, Building Class A, Building Class B, and Building Class C.
Here, we’ll discuss everything you need to know about investing in Class A Buildings, which are the cream of the crop.
What is a Class A building?
When investing in commercial real estate, a Class A building is the top end of available properties. They are the newest and have the best quality construction. They tend to be aesthetically pleasing and have high-quality infrastructure. In addition to being well built and pretty, these commercial structures also tend to have the best locations.
Class A buildings will be in an area’s central business district, have great parking or public transportation access, and be particularly easy to locate. Because of this, landlords in Class A buildings are able to charge some of the highest rent in the industry.
What are the qualities of a Class A building?
Prestige is currency when discussing building classes. The biggest players in the business world would be interested in renting out office space in a Class A building. Industry examples are the Sears Tower in Chicago or One World Trade Center in New York.
International banks, worldwide airlines, and global publishing companies choose these sorts of buildings as a home base to conduct their businesses.
To see if you’ve truly got a Class A building on your hands, take a look at the following characteristics:
Class A buildings are usually multi-story (usually a high-rise) with an accessible floor plan.
For Class A building, the taller it is, the better it is. These sorts of buildings are usually the towering, glitzy skyscrapers that dominate the skylines of major cities. The elevators and stairwells of the building should be central and easily accessible, as well as any kitchens, restrooms, and break rooms on each floor.
Class A buildings are in great locations with easy access to the rest of the central business district.
Class A buildings are at the center of it all. If you have to travel a significant distance away from the hub of a city to access a property, the building, no matter how nice it is, is not a Class A.
Class A buildings have attended lobbies.
Class A buildings all have attended lobbies. The doorman, security personal, and receptionist are usually provided by the building management and not by any one tenant.
Class A buildings have state-of-the-art HVAC systems.
The temperature in a Class A building should always be perfect. Tenants on each floor should be able to customize the temperature as needed and the infrastructure of the building should be able to support these needs.
Class A buildings have lightening fast wi-fi.
The internet is essential to business. Class A buildings should have internet at almost unbelievably quick speeds.
Class A buildings have covered parking.
Parking is essential for a Class A building. Whether it’s a parking garage next door, or simply underneath the main office space is up for debate, but the space needs to be covered and it needs to be onsite.
Class A buildings are near to public transportation.
There should be a bus, train, or tram stop within comfortable walking distance of the main entrance to a Class A building. In large cities, there should be multiple options.
Class A buildings house premier tenants.
As mentioned, if you own a Class A building as a real estate investor, it’s going to be almost too easy for you to attract powerful, high-paying tenants. Money attracts money and once word gets out about the who’s who in tenants, expect others to follow.
Class A buildings have modern design.
A Class A building should be chic, attractive, and on the cutting edge of design. There should be no question if they have updated furnishings 0r need remodeling.
What is a Class A+ building?
You might have heard of a Class A+ building. Class A buildings are the only ones that are able to have an extra layer of prestige on top.
In much the same way that a hotel or resort can have “six stars” a Class A+ building is everything a Class A Building is, and then some.